08 November 2012: Nifty Elliott wave analysis: Nifty has closed above 5760. Is it a breakout? We will get answer today. I have said earlier also for the fall after UP President Election. US market has seen the desired dip.

You must read previous articles and watch above chart carefully to understand this article completely.

Today’s outlook: -

I have quoted earlier that market will fall after US president election irrespective of the out come. Yesterday, I have quoted that possibility is that Mr. Barak Obama could win but market will fall. I was little shocked to see the reaction of Indian market but Indian market has history of over reacting on events. We have finally seen the fall US stock market. I have predicted for the fall of 4-5% and we got only 2.50% as of now so we may see more selling. I kept on quoting that based on S&P 500 charts; there is a need to press panic button. Equally, it cannot be right for Indian market.

Perhaps due to that reason Nifty hit 5777 while DOW Jones hit triple century.

Now, one can ask me what the reasons are.

Well, it was same fiscal cliff while media has talked in USA so many times in past few days. Only difference is that I am giving it a highest priority. This is a challenge which can be tougher to handle by anyone. I strongly believe that US policy makers has created a mess after QE 3, which seems to be rejected by market now.

S&P 500 – I have already said that 1435-1438 will a very tough resistance and this band remains untested. We have seen final break below 1404 yesterday (which was quoted too many times), now settled at 1395 levels. Do expect 1380 to 1370 soon. Will it see fall of 10%? I cannot deny such days although I need to wait for more technical confirmation.

Nifty India – this is a perfectly designed puzzle. It has broken 5630 first and slipped further by 47 points to hit 5583. Then, it moved higher to break 5730 and moved higher by 477 points to hit 5777. A perfect and simple mathematics. Question is what is next?

When you think that now market will go up then it will surprise you. I was talking about this surprise yesterday. Expect opening near 5710-5720. Then, just focus on 5680 as support. If nifty breaks 5680 by any chance then you can see a very sharp dip towards 5630. On higher side, it may not try to cross 5730 after gap down.

It (Nifty India) is complex part of the world. I am short but I want to more confirmation to hold. Do take a note that our market has very narrow trading band. You can think about 6000 or 5400 but this market is not moving beyond 100 points.

Regards,

Praveen Kumar